Today - as you would almost certainly know - is the
third anniversary of the first Bali bombing and our major report tonight
provides an alarming twist to the ongoing terror campaign being waged in
Indonesia. David O'Shea, a long-time "Indonesia-watcher",
reports that where terrorism is concerned in that country - with its
culture of corruption within the military, the police, the intelligence
services and politics itself - all is never quite what it seems.

REPORTER: David O’Shea

When the second Bali bomb exploded, Australia once again found itself
on the front line in the war on terror. But for Indonesians, this was
simply the latest in a long line of atrocities. They have born the brunt
of hundreds of attacks over the years, most of them unreported in the
West.
Once again Australia and Indonesia joined forces in the hunt for the
Bali killers.

SUSILO BAMBANG YUDHOYONO, INDONEASIAN PRESIDENT: We are determined
to continuously fight terrorism in Indonesia with an effective global,
regional and international cooperation.

JOHN HOWARD, AUSTRALIAN PRIME MINISTER: Tragic incidents such as this,
so far from driving apart the people of Australia and Indonesia, would
only bring us closer together.

This show of unity is impressive and it plays well to Australian
audiences, but many Indonesians don't see it that way.

JOHN MEMPI, SECURITY AND INTELLIGENCE ANALYST (Translation): Why
this endless violence? Why are there acts of terrorism year in, year
out? Regimes change, governments change, but violence continues. Why?
Because there is a sort of shadow state in this country. A state within
a state ruling this country.

For seven years I've reported from every corner of this vast
nation, and seen first hand the havoc that terrorists wreak. Tonight I
want to tell you a very different story about Indonesia's war on terror.
It contains many disturbing allegations even from a former president.

ABDURRAHMAN WAHID, FORMER INDONESIAN PRESIDENT: The Australians if
they [think they] get the truth, I think it's a grave mistake. [ie they
are mistaken]

REPORTER: What do you mean?

ABDURRAHMAN WAHID: Yeah, who knows that the owners to do this, to
do that -- orders to do this, to do that came from within our own
forces, not from the culprits, from the fundamentalist people.

(1) TERRORISM - THE CASH COW:

Indonesia's police are doing very nicely, thank you very much, out of
the war on terror. They now have all the latest equipment, courtesy of
the millions of dollars pouring in from the West.
The money ensures the world's most populous Muslim nation remains on
side in the fight against terrorism.
Mastering all of this new technology represents a steep learning curve
for the Indonesian police. Unfortunately today they forget to set up the
X-ray machine properly.

POLICE (Translation): Is the film in?

POLICE 2 (Translation): I haven't put it in yet.

Luckily there's an old print lying around from a previous
exercise.
Because of the war on terror, American and Australian support for the
Indonesian police has never been stronger.
During Dai Bachtiar's 5-year reign as police chief, Indonesia endured
countless act of terror including three major ones - in Bali, then the
Marriott Hotel and the Australian Embassy in Jakarta. These massive
blasts might have forced the resignation of any other senior official
but Dai Bachtiar managed to survive with the backing of powerful friends
at home and abroad.

POLICE CHIEF (Translation): I met Paul Wolfowitz.

In Indonesia's parliament earlier this year, I found the police
chief boasting about how he gets the star treatment when he visits
Washington.

POLICE CHIEF (Translation): I went to Washington, to the White
House, to the West Wing. I spoke to Colin Powell in his office. I went
to the Pentagon, I met the director of the CIA, the director of the FBI,
I met them all.

Indonesia's police are in charge of the war on terror. Years of
human rights abuse by the Indonesian military, or TNI, mean it's now out
of favour in Washington, but it seems the police can do no wrong.

POLICE CHIEF (Translation): I asked Powell. "You say the TNI
has to reform, don't the police have to as well?" Building trust
takes time.

Many Indonesians would find the idea of trusting the police
laughable. It has long been regarded as one of the most corrupt and
incompetent institutions in the country.
Former president, Abdurrahman Wahid sums up what many people here
belief.

ABDURRAHMAN WAHID: All of them are liars.

REPORTER: Just to be clear, you have your doubts about the police
ability to investigate properly all of this?

ABDURRAHMAN WAHID: Oh, yes.

But none of this seems to worry Indonesia's allies in the war on
terror.

POLICE (Translation): Have you just got back?

DAI-BACHTIAR, POLICE CHIEF (Translation): I see this man a lot.

POLICE (Translation): Were you in America? Did you get any more
money?

DAI-BACHTIAR (Translation): 10 million. We get big bucks. We got 50
million all up. Sure. They keep asking about 88.

That's Detachment 88, the police counter-terror unit which
receives a great deal of the international aid, including substantial
assistance from Australia.
Like the military, Detachment 88 is controversial. Its members stand
accused of repeatedly using torture in interrogation of suspects. But
these allegations don't seem to even raise an eyebrow.

DAI-BACHTIAR (Translation): The Secretary-General of Interpol came
to visit Aceh. I met him. He said our police were dealing with terrorism
in a professional manner. 500 million euros. For the police. Long term.
So far I've received directly 500 from Denmark. They gave 5, but 500 all
up. The Dutch gave 2.

The money is flowing like water but outside the chamber, unrelated
to the anti-terror funding, is a scene that should make donors think
twice.
A man from the Religious Affairs Commission sitting next door counts
cash to be distributed amongst voting politicians. Call it corruption or
even the trickle down effect, but it's this kind of informal funds
distribution which keeps the wheels turning in the Indonesian economy.

DAI-BACHTIAR (Translation): Well now, for example, the other day I
got 2 million from Holland... From America... it was 50. Is it 50
already? You know how much the army got? 600. Then they had to get
involved.

With all the cash flowing about, some politicians want to stay as
close as possible to Dai Bachtiar.

With the cash cow growing fatter by the day, some analysts even
suggest the police now have too much to gain from the war on terror.

JOHN MEMPI (Translation): But why is there always this worry about
bombings? This subservience to foreigners, this paranoia about bombs.
You must help us with money, with equipment and training, so that we can
do something. We need funds to combat these terrorists. And to convince
the foreigners bombings do happen. Indeed there are acts of terrorism in
Indonesia but done by "terrorists" in inverted commas.

(2) A TERRORIST ON THE PAYROLL:

To most Australians terrorism in Indonesia means Jemaah Islamiah. Abu
Bakar Bashir, Dr Azahari and Noordin Mohammed Top have become household
names and we're led to believe they're the masterminds behind every
atrocity.
But there's another side to the JI story that Australia hasn't heard and
it's part of the extraordinary family history of this man.

LAMKARUNA PUTRA (Translation): This is Tengku Fauzi Hasbi after he
was released. He returned to working and supporting his family.

Lamkaruna Putra's father was an Acehnese separatist leader descended
from a long line of Acehnese fighters. He went on to become a key figure
in Jemaah Islamiah. Fauzi Hasbi who used the alias
Abu Jihad was in
contact with Osama bin Laden's deputy.
He lived for many years in the house next door to Abu Bakar Bashir in
Malaysia and was very close to JI operations chief Hambali.
Umar Abduh is an Islamist convicted of terrorism and jailed for 10 years
under the Suharto regime. He belonged to a group that attacked police
stations and hijacked a Garuda flight to Bangkok. He remembers Fauzi
Hasbi as a hardliner who traded arms was willing to commit acts of
violence.

UMAR ABDUH (Translation): Fauzi Hasbi is known in the Islamic
movement as someone who, from the beginning, has supported the Jihad as
the struggle of the Muslim people, aside from his background in the Free
Ache Movement.

Fauzi Hasbi was so relaxed amongst the militants, and they with
him, that he even took his son to a critical meeting in Kuala Lumpur in
January 2000 as JI was preparing for its violent campaign. The
attendance list was a who's who of accused terrorists.

LAMKARUNA PUTRA (Translation): There was someone from MILF in
Mindanao, his name was Ustad Abu Rela, commander of the Abu Sayyaf.
Ustad Abdul Fatah from Patani was there. People from Sulawesi and West
Java came to the meeting.
The organisation was managed by Hambali. Rabitah means organisation. It
linked Islamic organisations.

REPORTER (Translation): So Hambali was chairman?

LAMKARUNA PUTRA (Translation): Yes, Hambali chaired it.

Hambali and co would have known their colleague Fauzi Hasbi had
been captured in 1978 by this Indonesian military special forces unit
but they wouldn't have known that he became a secret agent for
Indonesian military intelligence.
The commanding officer that caught him was Syafrie Syamsuddin, now a
general and one of Indonesia's key military intelligence figures. These
documents obtained by Dateline prove beyond doubt that Fauzi Hasbi had a
long association with the military.
This 1990 document, signed by the chief of military intelligence in
North Sumatra, authorised Fauzi Hasbi to undertake a special job. And
this 1995 internal memo from military intelligence HQ in Jakarta was a
request to use brother Fauzi Hasbi to spy on Acehnese separatist, not
only in Indonesia but in Malaysia and Sweden.
And then this document, from only three years ago, assigned him the job
of special agent for BIN, the national intelligence agency. Security
analyst John Mempi says Fauzi Hasbi alias
Abu Jihad played a crucial
role within JI in its early years.

JOHN MEMPI (Translation): The first Jemaah Islamiyah congress in
Bogor was facilitated by Abu
Jihad, after Abu Bakar Bashir returned from
Malaysia.
We can see that Abu Jihad played an important role, he was later found
to be an intelligence agent. So an intelligence agent has been
facilitating the radical Islamic movement.

The extraordinary story of Fauzi Hasbi raises many important
questions about JI and the Indonesian authorities. Why didn't they smash
the terror group in its infancy? Do they still have agents in the
organisation? And what information, if any, have they had in advance
about the recent deadly spate of terror attacks?
The Indonesian intelligence chief refused Dateline's request for an
interview and dead men tell no tales. The man who held all the secrets,
Abu Jihad was disembowelled in a mysterious murder in early 2003, just
after he was exposed as a military agent. His son, Lamkaruna Putra died
in this plane crash last month.

(3) PROMOTING TERRORISM:

Fauzi Hasbi's death led to a flurry of speculation about shadowy
intelligence links to Indonesia's terror networks.

UMAR ABDUH (Translation): So there is not a single Islamic group,
either in the movement or the political groups that is not controlled by
Intel. Everyone does what they say.

Umar Abduh says his terrorist group was incited to violence after
infiltrators showed a letter saying Muslim clerics would be
assassinated.

UMAR ABDUH (Translation): There is a document stating that the
Muslim leaders would be executed, we as a younger generation were
immediately angered. Damn it, this is not right, we have to kill all
those Cabinet members and military leaders, that was our plan.

And he's not the only one who says he was used by intelligence
agents. Another convicted terrorist is Timsar Zubil who exploded three
bombs in Sumatra in 1978. Although no-one was killed, he paid a heavy
price.

TIMSAR ZUBIL (Translation): At first I was sentenced to death, it
was changed to a life sentence, I served 22 years.

Zubil now believes he was set up by former president Suharto's
intelligence agency.

TIMSAR ZUBIL (Translation): We may have deliberately been allowed
to grow in such a way, that we young people who were very emotional,
were provoked into committing illegal acts.

REPORTER (Translation): Who let this happen?

TIMSAR ZUBIL (Translation): The ones who had the authority to ban
us, in this case the ones in power, the Suharto regime. I have only
started thinking of this recently, but at the time I was active, I
didn’t think it through.

After Zubil was captured, beaten and tortured, something
remarkable occurred. The authorities made up a provocative name for his
group - Komando Jihad.

TIMSAR ZUBIL (Translation): It hadn’t occurred to us to use that
name, but they told us that was to be the name of our organisation. We
had no plans to use the name Komando Jihad. They told us to just accept
it for the time being and if we wanted to deny it later in court, that
was up to us. But it made no difference to the court, they insisted that
the name was indeed ours.

(4) STATE SPONSORED TERROR:

Indonesia's recent history of terrorist attacks began with a deadly
campaign that unfolded on Christmas Eve 2000. Bombs exploded almost
simultaneously at 18 sites, mostly churches, across six provinces, 19
people died and 120 were injured.
Jemaah Islamiah took the blame. It was the first real mention of the
group in Australia. But Indonesians had another theory - they suspected
the military, the only organisation with the capacity to pull off an
operation of this scale, a full two years before the first Bali bomb.
The respected news magazine Tempo even splashed the allegation on its
front cover as part of a special investigation. The most revealing
information in the report related to the bomber's network operating in
Medan, North Sumatra. The man convicted of making the bombs in Medan is
somewhere behind these prison walls.
Our repeated requests to interview Edi Sugiarto over many months have
been ignored by the Indonesian authorities. Guilty or not, reputable
sources claim he was so severely tortured before his trial he would have
admitted to anything. But it's clear he wasn't acting alone.
The Tempo investigation included telephone records revealing sensational
information of direct links between the bombers and military
intelligence. The records also show that Fauzi
Hasbi, the military
intelligence agent in Jemaah Islamiah who we mentioned earlier, was at
the centre of the plot. He had spoken to Edi Sugiarto, the bomb maker,
seven times and had also called a businessman well connected with the
military 35 times.
That businessman in turn rang a Kopassus special forces intelligence
officer 15 times and the officer had called the businessman 56 times.
With Edi Sugiarto in jail, all further investigation ceased and five
years on, sources in Medan are too afraid to talk. The trail has gone
stone cold.

(5) TERROR IN TENTENA:

George Aditjondro is an early riser. As Indonesia's leading
researcher into corruption in high places there never seem to be enough
hours in the day. For two years he's been investigating a terror
campaign in Poso, Central Sulawesi. His research reveals that terror in
Indonesia is much more complex than we are led to believe.

GEORGE ADITJONDRO: There is a mafia, a corruption mafia in Poso
who were defending the interests of themselves because if the corruption
leaked, the corruption mafia could be exposed, that means the end of
their career and also the end of their additional income.

Aditjondro says this corrupt network of local government
officials, police and others is using terror to protect a local racquet
in Central Sulawesi.

GEORGE ADITJONDRO: Between corruption and terror, there is a very
close link because those who were carrying out the terror were paid with
corruption money.

Central Sulawesi had just emerged from years of conflict before
the latest outrage on May 28 this year. In the predominantly Christian
town of Tentena, 60km to the south of Poso, two bombs left 23 people
dead. A blast that claimed more victims than the second Bali attack, but
received scant coverage outside Indonesia.
The first foreign journalist to arrive on the scene, without any
evidence at all reported Jemaah Islamiah was to blame for the attack and
then promptly flew back to Jakarta.
Like the latest Bali bombs, the two bombs that exploded here were full
of shrapnel, designed to kill and maim. The first one went off at 8.05
in the morning when the market is busiest.

WOMAN (Translation): This is a thoroughfare, people are always
passing, people who want to go there pass here.

This woman is one of thousands of Christian refugees who found
sanctuary in Tentena during sectarian violence that cost hundreds of
lives in recent years.

WOMAN (Translation): I’m still traumatised. We were chased out
of our villages and came here, but it is not safe here either.

A second bomb blew 10 minutes later around 200m away on the other
side of the market. Reverend Rinaldy Damanik says it was placed and
timed to cause maximum casualties.

REVEREND RINALDY DAMANIK (Translation): The bits of metal in the
bomb flew as far as that church. What’s really going on? They showed
they can do it under the police’s noses. That’s the police station,
imagine this happening in front of the police station.

Reverend Damanik is a powerful figure in this Christian
stronghold. For years he defended his community as Islamic fighters
swarmed in to wage jihad. I first met him at Christmas in 2001 after
villages all around Tentena were razed. He was convinced the army was
behind the violence and had even left a calling card.

REVEREND RINALDY DAMANIK (Translation): This is an ammunition box
that we found at the time of the attacks in Sepe. It is clearly
labelled, Department of Defence, Republic of Indonesia. 1400 pieces of
5.56mm calibre munitions. This means it was meant for M-16s.

George Aditjondro says that in every Indonesian hotspot, the army
foments trouble by funding and arming both sides. In the case of Central
Sulawesi, both Muslim and Christian militia.

GEORGE ADITJONDRO: So the money does not have to come from rich
people like Osama bin Laden and the weapons doesn't have to come from
southern Philippines or from other exotic places but is actually coming
from the official sources and that is why I am saying that the kind of
terrorism which we see in Indonesia is home grown terrorism.
It's a kind of duel function or triple function of the armed forces.

The late reverand Agustina Lumentut told me in 2001 that the
Indonesian military was using proxy armies to do their dirty work.

THE LATE REVEREND AGUSTINA LUMENTUT: It is for sure, for sure that
the army is behind the jihad, or in front of jihad, yeah. No other
interpretation.

It was proved beyond all doubt that one of the extremist groups,
the Laskar Jihad, was supplied, transported and incited by the central
government to go on its murderous spree.

THE LATE REVEREND AGUSTINA LUMENTUT: Who dare among them to say
"Stop going that." Because they have reason for doing that,
they are registered officially by the government, the central
government.

Indonesia's President Susilo Bambang Yudhoyono is applauded in
Australia as a moderate Muslim leading the fight against terror in
Indonesia. But as the influential coordinating minister for politics and
security, he chose not to stop the Laskar Jihad and was even supporting
them.

SUSILO BAMBANG YUDOYONO: They also play a role in defending truth
and justice that is expected by Muslims in Indonesia. For me, as far as
what they are doing is legal and not violating law, then this is OK.
This was a ridiculous statement.

Yudhoyono was well aware of the carnage that was under way.
Since 2001 things had improved somewhat, as Reverend Damanik tells these
politicians from Jakarta visiting after the May 28 bombs. But local
leaders are afraid terrorism is being used to derail reconciliation
between Muslims and Christians.

REVEREND RINALDY DAMANIK (Translation): The wounds are very deep
but they can be endured. But the question is, what is happening to this
country? People can’t work because they’re always on their guard,
what can we achieve when we’re like that? What’s happening to our
country? We need to think about this, but it’s hard to answer right
now.

With weapons handed in and a peace deal holding up well, Reverend
Damanik's former sworn enemy is also very suspicious about the times of
the bomb in May. Muslim leader Adnan Arsan wonders whether the attack
was designed to prevent the army from leaving.

ADNAN ARSAN (Translation): Just when a security unit’s work is
over and someone says “We’re going home and I hope there’s no more
trouble…”Just as they are being recalled there’s another explosion
and more killing.

In the days following the blast, all the big names in Indonesian
security and intelligence descend on the area. Central Sulawesi police
commander Arianto Sutardi tells me the investigation is going well.

REPORTER (Translation): Sir, have you any idea who the perpetrators
are?

Then national police chief Dai
Bachtiar, the man receiving all the
foreign cash arrives to assert his authority. After less than one hour
on the ground, he's made his assessment.

DAI-BACHTIAR (Translation): We all hope… incidents like this are
criminal acts, we need to expose the perpetrators and put them on trial.
People entrust this task to the security forces.

Considering the evidence of corruption here and the police chief's
record of enforcing justice, that's unlikely.
George Aditjondro's research has uncovered a scam involving local police
who have looted up to $2 million for the resettlement of refugees.

GEORGE ADITJONDRO: You can see a cabal involving both the district
head, the acting district head at the time, certain police agents,
certain people within the department of social affairs and their
friends. They were carrying out both the corruption as well as using the
corruption money to pay the terrorists.
So you can see we are talking about home grown terrorism paid by home
grown corruption.

He says the May 28 Tentena blasts were an attempt to stop honest
police uncovering more about their scam.

GEORGE ADITJONDRO: You can say that the bombing can be seen as the
apex, the ultimate development of the kind of terror which they were
committing. It had gone as far as paying police to decapitate a village
head man, the village head man of Pinadapa.

The corrupt and murderous cabal identified by Aditjondro is now
suing him, and the police seem to be in no hurry at all to follow up the
leads as he identified. Instead on his departure the police chief Dai
Bachtiar offers another bland statement about the certain groups
responsible for the violence.

DAI-BACHTIAR (Translation): The situation seemed so promising but
certain groups have taken advantage of it to carry out actions such as
bombings, which of course will again cause fear and anxiety.

As Dai Bachtiar's plane heads back to Jakarta, more bigwigs
arrive. Syamsir Siregar is the recently appointed head of the national
intelligence agency BIN. His appearance is supposed to inspire
confidence in this investigation. But BIN has a long-standing dismal
reputation in Indonesia for dirty tricks.
The agency is currently fending off damning evidence that it was behind
the poisoning of Indonesia's best known human rights campaigner, Munir
Said Thalib. As I reported earlier this year, Munir was given a lethal
dose of arsenic in his orange juice on a Garuda flight to Europe.
On the Tentena bomb investigation, Siregar has nothing to say.

REPORTER (Translation): If you don’t want to talk about this, what
about the Munir case? How’s the internal investigation into the
involvement of…

SYAMSIR SIREGAR (Translation): You speak good Indonesian!

REPORTER (Translation): If any rogue elements are involved, what
will you do? …

Rogue elements indeed. Travelling with him is Timbul Silaen, he
was police chief during the carnage in East Timor. He was acquitted of
crimes against humanity, one of several commanders who escaped justice
for orchestrating the bloodshed. Now he's officially retired from the
police force. So what on earth is Timbul Silaen doing here with the new
chief of intelligence?
Is he just along for the ride or is he now on the intelligence payroll?
Whatever the answer, the continuing role of these same old state
terrorists is truly disturbing.
It's no wonder the locals are now deeply suspicious of anyone sent in to
protect them. While the police can claim some success arresting
terrorists in Java, in this region results are few and far between.
After years of state sponsored terror, no-one wants to help the
authorities.
This woman jokes that fear of talking to the police has become a popular
movement.

WOMAN (Translation): The tight lipped movement. People don’t
want to be witnesses. They are scared so they shut up, if they see
something they deny it, they’re scared.

The first real break in the investigation comes a week after the
attack and leads police to, of all places, Poso prison.
Incredible as it may sound, a police forensics team finds evidence the
bomb was manufactured in the workshop, used for prisoner rehabilitation.

POLICE (Translation): It’s a workshop for teaching them welding
skills.

The fact that the bomb may have been assembled in a state-run
facility, further bolsters the central thrust of Aditjondro's remarkable
research. That there is high level involvement in terror in Sulawesi.

GEORGE ADITJONDRO: What we have found out is just the tip of the
iceberg. It shows a permanent pattern which has been going on for the
last five years.

For the record, the authorities reject his allegations.

(6) QUESTIONS ABOUT BALI:

Two weeks after the second Bali attack and despite plenty of help from
the Australian Federal Police, Indonesian authorities are still pursuing
the culprits.
But a familiar pattern has emerged. Asia's most wanted men, the
so-called masters of disguise, Dr Azahari and Noordin Top have been
named as the masterminds. And once again everyone is insinuating Jemaah
Islamiah is behind the bombs.
That may eventually be proved correct, but so far no evidence has been
produced, at least publicly, to back that claim. As we've shown tonight,
after enduring years of state-sponsored terror, it's no wonder many
Indonesians question what they're being told about this latest atrocity.

GEORGE ADITJONDRO: You hear again the sources - the statements
that it was carried out by Azahari and Noordin Mohammed Top and a
radical Muslim groups behind it. Although what I heard is this actually
shows a rivalry, internal rivalry within the armed forces.

George Aditjondro didn't provide any evidence to back his
allegation, but theories like this are hard to write off just yet.
Former president Abdurrahman Wahid tried in vain to rein the military
and it cost him the presidency. In 2003 just after the Marriott Hotel
blast, he was clearly frustrated by foreign intelligence claims that JI
were to blame.

ABDURRAHMAN WAHID: They can say whatever they want but we are
here, we live here, we know them. But I won't say who.

REPORTER: But you know who it is, you think?

ABDURRAHMAN WAHID: No, no, I don't know. When I said that I meant
we cannot know - we cannot know the truth about that. That is the
problem always.

REPORTER: But that bomb has been blamed also on Jemaah Islamiah.

ABDURRAHMAN WAHID: Yeah, I know but you don't have any kind of
proof. The proof is that the bomb is similar to that belong to the
police. It's a problem for us then. Every bomb there until now it
belongs to the government.

Today is the third anniversary of the first Bali attack that saw
202 people killed, including 88 Australians. Abdurrahman Wahid now has
questions about that attack as well.
While some regard him as an Eccentric, he is the former president and is
often described as the conscience of the nation, revered by tens of
millions of moderate Muslims. As such, he's one of only a few people
publicly prepared to canvass the unthinkable - that Indonesian
authorities may have had a hand in the Bali atrocity.
He believes that the plan for the second, massive at the Sari Club,
which caused the majority of casualties, was hatched way above the head
of uneducated villagers like Amrozi.

ABDURRAHMAN WAHID: Amrozi was involved in the lighter bomb. That's
a problem always. Even though I agree that he should be given a stiff
punishment, but it doesn't mean that he is involved. No, no, no.

REPORTER: So you believe that the Bali bombers had no idea that
there was a second bomb?

ABDURRAHMAN WAHID: Yeah, precisely.

REPORTER: And who would you suggest planted the second bomb?

ABDURRAHMAN WAHID: Well, it looks like the police.

REPORTER: The police?

ABDURRAHMAN WAHID: Or the armed forces, I don't know.

Wahid's speculation is chilling and again there's no evidence to
support it. But there's no doubt that he's a barometer of how many
Indonesians view the whole terror campaign.

(7) BACK TO THE FUTURE:

This ceremony in July marked a significant moment in the evolution of
Indonesia's fight against terrorism. The nation's most senior police
watched as their chief, Dai
Bachtiar, was replaced by General Sutanto,
touted as a cleanskin.
Following his swearing in, he made an impressive start - launching a
high profile anti-drug campaign and promising to crack down on rampant
corruption within the police force. But for now, he's getting familiar
with the rhetoric required for the job.

GENERAL SUTANTO (Translation): We are sharing experience with
other countries in order to eradicate the terrorism.

But it's not the experience sharing with other countries that
matters, like every police chief before him, he will only ever play
second fiddle to the army and will struggle to control the cabal of
rogue elements who still wield massive power here.
Abdurrahman Wahid says that
no policeman would dare to properly
investigate repeated allegations that their big brothers in the military
are involved in the terror campaign.

ABDURRAHMAN WAHID: They know it's against see, what they do - was
against you see, several, you know, senior officers, even of the police
itself. So they don't want to be involved.

REPORTER: Because?

ABDURRAHMAN WAHID: Of the fear.

REPORTER: The fear of what? Of the senior officers that are
involved in this?

ABDURRAHMAN WAHID: Yeah, yeah, yeah.

At the moment it's the police who are receiving all the equipment,
support and training to take on the terrorists. At the opening of this
multi-million dollar training facility, which is part funded by
Australia, the Indonesians were keen to show off their skills. The war
on terror has brought the two nations closer together, but any
Australian concerns about corruption and human rights in this new
partnership appear to have been put aside for now.
But the Indonesian police's leading role in the fight against terror may
be about to change anyway. In the wake of the latest attack in Bali,
President Yudhoyono has taken steps to rehabilitate the military's
tarnished name and bring them back into the counter terror drive.
For those who risked their lives opposing Suharto's brutal military,
it's a disturbing thought. That the retired general, President Yudhoyono,
known in Indonesia by his initials Sbyeah, may be ushering in a return
to those bad old days.

GEORGE ADITJONDRO: Now, General SBY, himself, he doesn't like to
be called general SBY, he likes to be called Dr SBY has made the
statement that the military is ready to help, to assist the police in
chasing the terrorists. In other words, the military is looking for an
alibi for a reason to reconsolidate their power as during the Suharto
period.

Were the Bali bombers dupes?: International
counter-terrorism expert David J. Ford investigates the possibility that
the latest Bali bombers were tricked into carrying out their deadly mission –
a terrifying harbinger of things to come. Plus: an in-depth interview with Abu
Bakar Bashir